Carpet Court bought by Aussies

AN AUSTRALIAN fund manager has bought the Carpet Court business, which has 60 shops around the country, and is planning to expand it.

The optimism of that purchase is matched by the misery of the seller, private equity group Lincoln Capital Partners, which has seen all the equity it had invested in Carpet Court lost.

The Carpet Court business is the largest flooring retailer in the country and was owned by Flooring Brands, which was set up in 2004 with the aim of becoming the largest flooring retailer in New Zealand.

But yesterday Australian fund manager Allegro Funds said it had bought a controlling stake in Carpet Court, and once the deal was completed and funds injected into operation, it would be free of bank debt.

Rodney Martin from Lincoln Capital Partners said: ‘‘I lost all my equity in the deal.’’

Martin said he now planned to go to Britain to pursue opportunities there.

The deal with Allegro followed Flooring Brands’ bank, Westpac, losing patience with its progress.

‘‘It wasn’t in financial trouble, but our bank had nevertheless lost patience with us after having been up against it through the global financial crisis and for a couple of years after that,’’ Martin said.

‘‘The company’s profits had been increasing. It just wasn’t increasing as fast as the bank hoped. We just ran out of runway.’’

Once sale conditions are met, the assets of Carpet Court will be transferred to a newly established company called Carpet Court New Zealand Holdings.

Allegro said Carpet Court had recorded a ‘‘solid profit’’ in the 2015 financial year.

Allegro co-founder Chester Moynihan will be the new chairman of Carpet Court New Zealand. Carpet Court chief executive Rob Smith will remain in place.

Allegro said it was ‘‘looking to invest significantly in the rollout of its new store format and continue investment in centralised warehousing and distribution’’.

Allegro would be looking to retain all of the existing staff.